Trade Talks
196. How multinationals avoid taxes through technology licensing
Nov 19, 2023
The podcast explores how multinational corporations avoid taxes through technology licensing in low-tax jurisdictions like Bermuda and Luxembourg. It analyzes profit-shifting tactics, the dynamics of royalty payments, and the implications of a global tax agreement on research, development, and innovation.
28:40
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Quick takeaways
- Technology licensing enables global market expansion and production scaling for multinational corporations.
- Tax disparities influence technology licensing patterns, leading to concerns about profit shifting and fair taxation.
Deep dives
Importance of Technology Licensing for Multinational Companies
Technology licensing is significant for multinational corporations in industries like pharmaceuticals, semiconductors, and software. Licensing agreements involve allowing another company to use intellectual property like patents and trademarks in exchange for royalty payments. This practice enables companies to expand their reach, scale up production, and increase market presence globally. Notable examples include vaccine technology licensing during the COVID-19 pandemic and semiconductor chip technology sharing among companies.
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